Wal-Mart ( WMT ) said it will raise its starting wage to $11 an hour as part of an initial plan to "share in tax savings" with 1 million employees.
[ibd-display-video id=3076727 width=50 float=left autostart=true] The retail giant said the wage hike will cost it $300 million in the coming fiscal year, beyond its already-planned wage increases. Wal-Mart also said it will spend another $400 million in the current year ending Jan. 31 on one-time bonuses ranging from $200 to $1,000 based on length of service.
As the nation's largest private employer, Wal-Mart has a big influence on working-class wages, so its pay hike could result in increases for many other workers in modest-pay industries.
Shares of Wal-Mart fell 1 cent to 99.66 on the stock market today . Wal-Mart has been flirting with a 100.23 flat-base buy point, but the stock's relative strength line has been lagging while the major averages continue to climb.
The Dow Jones industrial average, Nasdaq composite and S&P 500 index all were up about 0.2%-0.3% in the early going after the Nasdaq and S&P 500 suffered their first loss of 2018 on Wednesday.
On Wednesday, Waste Management ( WM ) joined the parade of companies providing bonuses or wage hikes on the heels of tax cuts, saying up to 34,000 employees would get a $2,000 bonus . With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers.
Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). The generosity of those announcements was undercut somewhat by reports that AT&T and Comcast were in the midst of layoffs.
In addition, utilities are implementing modest cuts to the power bills of millions of customers .
IBD'S TAKE:Wal-Mart is ranked No. 2 by IBD in the Retail-Major Discount Chains industry group, based on earnings, sales, margin and stock performance trends. Visit IBD Stock Checkup to see how other retailers stack up. The Retail-Major Discount Chains group is ranked No. 41 of 197 industry groups based on stock performance.As long as the current " confirmed uptrend " - the equivalent of a green light - stays in place, leading stocks breaking above a buy point are more likely than not to have the wind at their backs. Here's a good place to start looking for stocks that may be poised to move higher.
Wal-Mart also announced additional benefits for full-time hourly associates, including 10 weeks of paid maternity leave and six weeks of paid parental leave, as well as adoption assistance of $5,000.
Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October. At the same time, Target made a commitment to raise its base wage to $15 an hour by the end of 2020.
In January 2016, Wal-Mart said it would hike its minimum wage for nearly all employees to $10 an hour, but it kept its starting wage at $9 an hour for employees in their first six months.
YOU MIGHT ALSO BE INTERESTED IN: